Court gives BNZ greenlight to shut Gloriavale’s bank accounts in move that could end the community

Gloriavale has three months to find a new bank, as the court has allowed BNZ to close its accounts. Photo / RNZ

The Court of Appeal has delivered a blistering judgment that could see Gloriavale wind up its operations.

It’s decided to dispose of an injunction that prevented BNZ from closing the exclusive religious community’s accounts.

BNZ can now close the accounts related to Gloriavale’s various businesses and entities in three months’ time.

In 2022 BNZ tried to end its 40-year relationship with Gloriavale on the basis its use of child labour breached the bank’s human rights policy.

BNZ made the call on the back of the Employment Court finding three former Gloriavale members were employees, not volunteers.

The Employment Court broadly accepted the former members, who had worked since the age of 6, were subject to physical and psychological punishment, and rigorous, and sometimes violent, supervision.

Gloriavale couldn’t find another bank to service it, so got an injunction put in place to temporarily prevent BNZ from terminating the relationship.

Following two years of legal disputes over the injunction, the Court of Appeal has allowed it to be disposed of.

In a hearing last month, Gloriavale’s lawyer Richard Raymond told the court that without access to banking services, “[Gloriavale’s] companies will fail - schools, food, living as required will not be able to eventuate, and it will effectively end the community.”

Justices Goddard, Katz and Mallon said, “If no other bank is willing to accept the Gloriavale entities as customers, that reluctance cannot be laid at the door of BNZ.”

They accepted the argument BNZ’s lawyer Stephen Hunter made: that BNZ had a contractual right to close the accounts “for any reason”.

They also said the decision “was not made on a whim, or for reasons unconnected with BNZ’s legitimate interests”.

Both BNZ and Gloriavale declined to comment.

The ruling could set a precedent for others who believe they’ve been unfairly “de-banked”.

Businesses related to cryptocurrencies and money remittance are among those that have struggled to get accounts at banks, worried about complying with anti-money laundering rules.

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.